Carbon Management For SMEs

There has been much hype surrounding climate change and emissions trading schemes. But what does carbon management mean for SME owners and how can it benefit their business?

While SMEs may not be required by law to report or reduce their carbon emissions, taking the right steps to improve or enhance their environmental credentials makes good business sense.

As with many business issues, being prepared and taking action sooner rather than later are the keys to a smooth transition and can help deliver the right business outcomes. Understanding what action to take is critical. To help you take some big steps in the right direction, here is a snapshot of carbon management lore.

Government regulations

There are two pieces of government infrastructure that SMEs may have heard about:

1. The National Greenhouse Energy and Reporting (NGER) Act: Implemented on July 1, the Act requires Australian corporations to account for greenhouse gas emissions and energy production and consumption, if they are above the specified thresholds.
2. The proposed Emissions Trading Scheme scheduled to commence in 2010: The emissions measurement required by the NGER Act also lays the groundwork for the affected businesses to engage in emissions trading through existing channels and, eventually, via the Australian Emissions Trading Scheme.

Although the greenhouse gas emissions and energy production and consumption of most SMEs will typically fall below the legislated thresholds of the NGER Act, they are still likely to feel the impact indirectly. The trickle-down effect from increasingly carbon-conscious clients seeking out more sustainable suppliers will force a review of smaller business’ practices and operations.

The business of carbon management
As we evolve into what is rapidly becoming a carbon-conscious economy, it is inevitable that all businesses will be forced to become accountable for their carbon footprint, that is the impact of their operations on the environment.

The benefits to business, big or small, of taking early and proactive steps to reduce and manage their carbon emissions and energy production and consumption can be both financial and reputational.

From a financial perspective, reducing and offsetting the business’ environmental impact can help to improve business efficiencies, streamline operational processes and ultimately bring cost savings. For example, a business that reduces its energy use by replacing equipment or undertaking more energy efficient practices will also be reducing its electricity bill. Improving the business’ environmental credentials can also help to boost its reputation among clients, customer and employees alike, all of which can also help to drive bottom line growth.